Formula One pays just £1million corporation tax on £300million profit

[VNA - BMW Wank]

F1, which is run by billionaire Bernie Ecclestone, made a net contribution of £945,663 ($1,468,000) in corporation tax in 2011 on revenues of £980m ($1.5bn) – even though the majority of its commercial operations are based in the UK.

http://www.independent.co.uk/news/uk/politics/exclusive-formula-one-pays-just-1million-corporation-tax-on-300million-profit-8728928.html?origin=internalSearch

[Lawrence]

And?  They haven't done anything illegal.

[DryRob]

And?  They haven't done anything illegal.

Are you a politician?

[Lawrence]

No. If what they do is so bad then the law needs to change.

[DryRob]

I know, I was just being a shit stirrer. I lost faith in the rich doing the right thing years ago.

[rustyrider]

Whoever wrote the article knows naff all about how F1 is organised either.  To make the point that none of the teams pay any tax is irreverent.  The teams are nothing to do with Mr E's empire and don't pay tax because they don't make a profit.  The Ferrari F1 team is a tax write off for  the parent company for instance.  The same goes for the others.  Whatever income they receive is spent on running the team, they aren't in business to make a profit.

At least they are paying some tax, more than you can say for Starbucks......

[VNA - BMW Wank]

Whoever wrote the article knows naff all about how F1 is organised either.

Did you read it?  Honest?

To make the point that none of the teams pay any tax is irreverent.  The teams are nothing to do with Mr E's empire and don't pay tax because they don't make a profit.

The article makes it clear that they are separate from the F1 business.  Whether they make a profit or not is up to them, there are certainly opportunities to do so, but again the article makes it clear that they don't pay tax cos they don't make any profit.

But Bernie's UK based business pays only 1 million tax on a 300 million profit.  It is making a profit, and it's making as much as it can.  So that's 71 million quid light on the tax.  Amazing.

And?  They haven't done anything illegal.

Indeed.  But clearly billions upon billions of tax are going astray and our politicians are doing nothing about it.  And they are getting away with it.

Just thought it was interesting that F1 is fiddling the books too.

[dBfazer600]

Such companies have a wider choice on their geographical location as in the average member of the population society do not. Therefore the lower taxable population are by default buggered as they do not have the money capable to employ those with the knowledge of how to bypass their taxation. Therefore  24% of profitable taxation can be made to look like nothing. Although the F1 business have not done any thing illegal in the eyes of the law set by out political establishment. It is time that that not just Starbucks but also all tax evasion corporate business are named and shamed regardless what they bring to our country.
 
It is down to the Government to bring in legislation to ensure we are all in it together. Yet as with the smoking advertising on their packages it is those who influence you that will get their way.
 
Money talks, bullshit walks unless your within the circle that influences.
 
Daz

[cable tie]

Politicians will say its wrong to do so but reality is there doing it exactly the same themselves you just don't no it ! and no one is braking the law with these schemes and these corp bods have an army of accountants and financial advisers to make sure there doing what's financially legal its all mind games give this big press takes our minds from the truth that this country is fooked.

Ask yourself if you could pay less tax every week and it was legal would you not do it  !

The truth being i cannot see peeps jumping up and down because immigrants have been given the rights to live here take our benefits and state pension, most/not all will never work and PAY NO TAX but will get everything in return and a dole chq every week for doing nowt but breathing ...

I can't see no one complaining about this !

[VNA - BMW Wank]

The truth being i cannot see peeps jumping up and down because immigrants have been given the rights to live here take our benefits and state pension, most/not all will never work and PAY NO TAX but will get everything in return and a dole chq every week for doing nowt but breathing ...

Not sure what you are saying.  But recent reports have shown we need lots more immigrants if our economy has to have any long term chance of recovery.  The vast majority of immigrants work hard and pay their tax, if they were 'removed' our economy would die overnight.  With an ageing demographic we are going to be stuffed without lots more immigration. 

It is down to the Government to bring in legislation to ensure we are all in it together. Yet as with the smoking advertising on their packages it is those who influence you that will get their way.

Indeed.  But tax dodging for big companies has become even easier since George got his hands on the economy. (not that it was difficult before)  We also seem to have a policy of letting foreign companies take over public services and even major utilities.  Whilst many, thought not all of these do pay their corporation tax, they then tax large amounts of their profit out of the UK.  Of course all that your millionaires cabinet (perhaps it will soon be billionaires cabinet) care about is what they can stuff into their back pockets.

Our economy does not look as if it has any real hope of making any sort of real long term recovery.  It's being set up to fail by a bunch of thieves who are grabbing what they can while they can.

Yup Bernie has been known for his generous political donations in the past.  I doubt if he just started tax dodging yesterday.

Here's another thing.  I can't remember Bernie owns F1 outright or he has a % stake, but he'll also pay himself a salary.   I'd guess it's substantial and that he pays sod all tax on it.  Yup more tax dodging. 

Talking of Starbucks and umm coffee.  I love coffee but I've never touched Starbucks.   If your local family owned coffee shop is a few quid out on their tax returns, you can bet the tax office will actually spend a not inconsiderable amount of money making sure that little business coughs up - same for me too, a couple of quid out and they peruse me relentlessly.  But Starbucks they don't pay any tax. 

Money talks, bullshit walks unless your within the circle that influences.

There is no bigger influence than public influence.   But.........

Meanwhile we have the red tops to keep us ranting about benefit cheats.  Doh!

[rustyrider]

It's not tax dodging, because tax dodging is illegal.  It's paying extremely knowledgable accountants probably an awful lot of money to work their way round the tax laws so none are broken but the minimum amount of tax possible is paid.

If I could do it I would and I suspect you would too.

[VNA - BMW Wank]

It's not tax dodging, because tax dodging is illegal.

Yes it's tax dodging, it's a way round paying 24% corporation tax.
72 million tax due, only 1 million paid.

No loopholes are not illegal, that's why they are loop holes.   

It's paying extremely knowledgable accountants probably an awful lot of money to work their way round the tax laws so none are broken but the minimum amount of tax possible is paid.

It's actually paying the same accountants who have done work for the government as consultants.  A of money?  Well sure but it's a tiny % of the 72 million saved.    It's a scam from one end to the other.

And of course everybody knows the loopholes are there, what they are, and indeed how they can be closed down.  But guess what, nothing happens.

If I could do it I would and I suspect you would too.

   
Well sure nobody wants to pay more tax than they can.  And I guess it's hard to blame companies and individuals from skipping tax if they can legally do so, but that's hardly the point is it.

I'm paye, I can't dodge my tax.  I can't dodge VAT, or a dozen other taxes I could mention.  I'm sure there is something I've dodged at some point (hey I paid my joiner cash!), but lets face it, the little men don't get to dodge tax.  And it's the little man who will make up the big man's shortfall.  And the shortfall is getting bigger and bigger and bigger, as fewer and fewer of the big boys pay any tax.

Of course it's not just a shortfall.  Stuff that needs to happen - infrastructure etc - it just doesn't happen.

[DryRob]

You could get around PAYE by leaving your job and starting up work as an independent contractor but you loose all employment rights like sick pay, redundancy, holidays and all that. The same would be true of VAT as you could put a lot of your stuff down as a business expense but if you wound up, you would loose everything. Don't know what business rates are like though and you'd need an accountant.

[VNA - BMW Wank]

So following that logic, everybody who's ranting about benefits and all the stuff they get should;

leave their job and live off benefits!  Have kids left right and centre I guess.  Work for cash on the side.  Buy a 150 inch telly.

[Raymy]

Don't be ridiculous Andy














A telly can only go to 60 inches by law

[VNA - BMW Wank]

Sorry.

Bloody tax dodging bastards.

[DryRob]

Where did I mention benefits? I was just suggesting a way to get around paying PAYE and the possible consequences of doing so.  I doubt that you could do it for most jobs anyway and why bother? You'd probably end up with the same in your pocket at the end of the week but loose all employment rights.

[rustyrider]

There are advantages to not being on PAYE and becoming a self employed sub contractor to your employer but as said, you'd lose most of the advantages of being an employee.  I'm on PAYE for the day job but am also registered as self employed for contract work I do as a sideline.  I have to fill in a tax return where I put in my income from my PAYE employment from the day job and then have to account for the income from the contract work.  The advantage there is that I can claim against tax any expenses I incur as a result of the self employment.  When I visit a customer to do the work, I can claim 45p a mile as a business expense, any tools or specialist clothing I buy to do the work, I can claim as an expense.  So, unlike the day job, I am not taxed on the full income, only the profit after the expenses have been taken out.  BUT, I also have to pay self employed National Insurance contributions on top of what I am paying through PAYE although if my self employment earns me less than £5k a year I can claim an exemption on this.

If I was to take out a loan to buy equipment that I need to do the work, I could claim the interest on that loan against tax.  This is how I understand F1 does it.  They take out a loan to provide operating capital and the interest payments on that loan are claimed as a legitimate business expense so they are not taxed on that amount.  The fact that the loan comes from another, legally separate, company within the same group is irrelevant but it does mean that the money all comes out of the same bucket and doesn't actually go anywhere.

There's a big difference between tax evasion, which is illegal, and tax avoidance by playing the system which isn't.  As I previously said, we would all, even VNA, do it if we were in a position to, it's just that most of us aren't.

[VNA - BMW Wank]

If I was to take out a loan to buy equipment that I need to do the work, I could claim the interest on that loan against tax.  This is how I understand F1 does it.

And fair enougth.  But,

The fact that the loan comes from another, legally separate, company within the same group is irrelevant but it does mean that the money all comes out of the same bucket and doesn't actually go anywhere.

Exactly.   So Bernie borrows the money for his right hand pocket out of his left hand pocket.  So if he swaps the money over in his pockets he doesn't have to pay any tax!

Now that sucks big time.  But will our government close down these loop holes  (umm no).  And if no big companies are paying their corporation tax, well where is the money going to come from.

Or is it simply the case that people in the UK want a tax system where the less you earn the more you pay.  As that is what we have.

Don't you think Bernie should be paying some tax, maybe even his fair share?

[rustyrider]

It's a loophole that would be virtually impossible to close.  A limited company is a legal entity and has the same status in law as a person.  So if one limited company loans money to another, it's just the same as if I was to loan you some money, we are completely separate legal entities and there is no way that anyone could say that we aren't.

I'm not happy with the way tax works either and if there was a legal way of reducing what I pay I would.  I had a good year last year with the day job.  I got paid additional allowances due to the Olympics and was also recognised for doing a good job by getting a bonus.  That put me very close to the 40% tax rate on what I was paid for the day job.  I also had a very good year on a private contract but I'm only going to see 60% of what I was paid for that.  Where's the justice in getting paid less for working bloody harder and doing a good job?

[VNA - BMW Wank]

It's a loophole that would be virtually impossible to close.

Perhaps, and I'm no tax expert.  But put it another way, laws could be tightened, many loopholes closed done and others substantially tightened.  This country is missing out on billions upon billions of desperately needed tax revenue, yet nobody seems bothered.

So if one limited company loans money to another, it's just the same as if I was to loan you some money, we are completely separate legal entities and there is no way that anyone could say that we aren't.

Yeah OK, but this is one Bernie company lending another Bernie company.  He's lending himself his own money.  I don't know if this is the case in Bernie's case, but I'd bet some of these companies are simply fronts for pushing money about and serve no other purpose.  And seriously how hard can it really be to stop such a practise.  I think the truth is our government doesn't want to do anything about it, and that may be becuase individuals within our government are benefitting hugely from these arrangements.

I'm not happy with the way tax works either and if there was a legal way of reducing what I pay I would.

In % terms, like many folks here I pay an absolute fortune in tax.  Yup Osborne has shoved my tax up to pay for tax cuts for rich folks.  I really don't mind paying my taxes if truth be told.  Though I object to it being spent on nuclear weapons, illegal wars etc (OK that's another matter), but I accept, and I accept as a socialist, that if you want a civilised democratic caring nation, yup I'm gonna have to pay tax and probably quite a lot.  Not a problem.

Look talking about loopholes.  Amazon does billions of pounds of trade with millions of customers in the UK.  Yet Amazon tells us they don't carry out any transactions in the UK and therefore they don't need to pay any corporation tax. I mean foc me!  I mean double foc me!  Foccing hell!  How the foc does that work!  They say it with a straight face too!  Focs sake. 

Major company after major company are using loose UK and EU tax laws so they they pay next to no, or in many cases zero corporation tax.

You know everybody is bitching about who got more than 20,000 quid in benefits, who got this and who got that.  There's a lack of jobs out there, but people out of work are work shy and so on.  We are probably talking about trying to save 100 million from the most hard up folks in society (and yes a minority do take advantage).

So which are people concerned about, the pennies or the pounds.  The money that makes a massive colossal  difference, or the savings that are as worthwhile as pissing into the wind.

That's all I'm trying to say.

Oh don't worry too much about the 40% tax bracket.  Not long after you start paying that you stop paying national insurance contributions.  (well it drops from 12% to 2%)  The 40% bracket is not as painful as those who pay it like to make out it is.

[rustyrider]

Amazon does billions of pounds of trade with millions of customers in the UK.  Yet Amazon tells us they don't carry out any transactions in the UK and therefore they don't need to pay any corporation tax.

But equally the huge Amazon warehouses scattered all around the country employ thousands of people.  All these people pay their income tax, National Insurance and spend their money so are contributing by paying VAT too.  I suspect that the combined contributions to the economy made by the workers at Amazon total more than Amazon would pay if they declared all their income as UK based.

Oh don't worry too much about the 40% tax bracket.  Not long after you start paying that you stop paying national insurance contributions.  (well it drops from 12% to 2%)  The 40% bracket is not as painful as those who pay it like to make out it is.

Isn't it?  My NI contributions haven't dropped they've actually gone up as I'm paying self employed NI contributions on top of my PAYE NI contributions.

Now, here's a suggestion for you as a good socialist.  My missus is from a communist country where there is no such thing as benefits.  But in actual fact there are.  Anyone unable to work due to illness or injury gets paid by the Government in much the same way as here.  However, anyone who simply isn't working because they claim they can't get a job because there are none, etc, gets nothing, in theory.  In practice everyone is entitled to a job and an income.  So the unemployed get given a job and, in return, get given their benefits.  Why can't we introduce a similar scheme?  Anyone claiming unemployment benefits gets nothing unless they put in at least 20 hours a week sweeping the streets, cleaning graffiti, picking up litter, clearing ponds, etc, the sort of jobs given to people on Community Service Orders.  The money would still come out of the benefits system but would at least be doing the country some good and the fact that the claimants are actually going out and doing something might make them more employable and give them an incentive to go out and get a full time job.

[VNA - BMW Wank]

But equally the huge Amazon warehouses scattered all around the country employ thousands of people.  All these people pay their income tax, National Insurance and spend their money so are contributing by paying VAT too.  I suspect that the combined contributions to the economy made by the workers at Amazon total more than Amazon would pay if they declared all their income as UK based.

The income from Amazon UK is UK based.  Yes they do carry out transactions in the UK, and it's estimated they are currently dodging tax of over 100 million a year.

Why if an Amazon employee has to pay tax do the bosses and shareholders get off Scot free.

Also Amazon pay a large % of it's workforce at just above the minimum wage - often I'm told 1p above the minimum wage.  A lot of these full time employees won't be able to make ends meet as the minimum wage is not a living wage.  So many Amazon employees will be claiming benefits. 

So not only are Amazon dodging 100 million in due tax but their tax dodging rich shareholders are being subsidised by 40% tax rate payers like yourself.   

And if they don't like paying their corporation tax, why not tell em take take run and jump?  There are plenty of companies that will be happy to step in and carry on where Amazon left off, and who knows they might not only pay their taxes but even pay their full time staff a living wage.

If I dodge my tax, I get the book thrown at me, it's time to do exactly that with Amazon.  Make em cough up or shut em down.

[rustyrider]

But like I said before, they aren't dodging paying the tax because that is evasion which is illegal, they are avoiding paying tax by being clever.

[VNA - BMW Wank]

I've never said it's illegal, I've never said they are breaking the law, nor has any of the articles that I have read about it, or the one I linked to said so either.

They are doing it becuase they can, and becuase they are allowed to.  And in my opinion, as I've said all along, the blame lies with our government.  They have as far as I can see spouted much hot air but taken no real effective action.    The way things are going they may as well scrap corporation tax.

Clever?  Sure, but I'd say cosy, when the very accountants that they use are also government tax consultants!

What I don't get is why you think that the rich should not have to pay any tax on their vast wealth and income, whilst you and I, along with the vast majority of folks here on this forum get taxed to the hilt.

As as I've said I'm happy to pay my tax, but not when Bernie and his chums don't have to.